0.28.9.inePricedeman1come emandMord10. Arc and Point PriceArthur's demand equation 1a. FindII2208.8. Price Elasticity of DemandLet Q = hamburgers per month. Karl's demand equation for hamburgers is:P = 24 -3QCalculate Karl's point price elasticity of demand when the price is $6.a -b PAQ_-3%3124-1/2@Price ED+ d-/2Q=24-eQ=72-3P%3D3.3.Q=-3p+ 72%3D9. Income Elasticity of DemandMaria's weekly demand for chocolate bars is a function of their price (P) and her income (M):Q =Q(M, P) = M/4P - 5/Pa. Find and simplify an expression for Maria's income elasticity of demand as a function of M.EM =b. Calculate Maria's income elasticity of demand when her income is M = 30.%3DC. Calculate Maria's income elasticity of demand when her income is M = 120.%3D= E II1216. Elasticity of a Linear Demand CurveSuppose that the market demand for widgets is linear:QD = a - bPa. Derive a formula for the point elasticity of demand as a function of price (P).EDb. Find a simple expression for ED at each of the following points (label points in diagram):P = a/b(vertical intercept)%DP = 3a/4b%3DP = a/2b (midpoint)%3D%3DP = a/4bED =%3D(horizontal intercept)ED =

Price elasticity of demand : Ed= % change in quantity demanded % change in price Income elasticity…

8. Price Elasticity of Demand Let Q = hamburgers per month. Karl's demand equation for hamburgers is: %3D P = 24 -13Q > Calculate Karl's point price elasticity of demand when the price is $6. = a - b P AQ -3 %3D %3D AP Price ED = 24-1/3Q '/3Q =24-P %3D P = シ2Q %3D Q=72-3P %3D Q Q=-3p+ 72 = 24-

8. Price Elasticity of Demand Let Q = hamburgers per month. Karl's demand equation for hamburgers is: %3D P = 24 -13Q > Calculate Karl's point price elasticity of demand when the price is $6. = a - b P AQ -3 %3D %3D AP Price ED = 24-1/3Q '/3Q =24-P %3D P = シ2Q %3D Q=72-3P %3D Q Q=-3p+ 72 = 24-

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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